Is Chattanooga entrepreneur Henry G. Luken III the savior of an Oregon company that builds "super yachts" for wealthy clients? Or is Luken a corporate raider who ran the boat builder into the ground so he could buy it at a discount?
A courtroom in Washington state will be the battleground for those competing versions of what happened at Christensen Yachts, a Vancouver, Wash., business that Luken - who's owned a number of luxury yachts - has co-owned for more than a decade.
Christensen went into a tailspin and temporarily laid off all of its employees in February of last year. The boat builder went into receivership, a form of bankruptcy, because it had more than $40 million in debt it couldn't pay. But Luken and a wealthy Florida friend and business partner, Donald Burns, bought Christensen Yachts out of receivership for $5.5 million, reopened the doors and hired a staff of more than 100 people.
Luken has painted himself as a white knight who saved the yacht builder from closing. But an attorney for the Christensen family, Kerry Shepherd, lays out a very different picture of what happened in a lawsuit filed this week in a federal court in Tacoma, Wash.
"Henry G. Luken III's $170 million fortune never seemed to be enough for him," the filing says. "So he raided Christensen Shipyards Ltd. ("CSL") by pushing the company into financial ruin and then buying all of its assets for cheap. In the process, Luken put hundreds of people out of work, stole a company that the Christensen family had spent decades building, and destroyed the Christensen family's legacy in Southwest Washington."
Shepherd made his charges in response to a lawsuit Luken filed in March for more than $22 million against the Christensen family members. Luken says he filed suit because they stole millions from him. Although he was part-owner of the shipyard, Luken said he didn't always have control of it, and had to wrest control back.
"It's about $15 million that just plain old disappeared," he told the Times Free Press in a previous interview. "My money is just gone."
Luken waved away Wednesday's court filing.
"I don't think they could tell the truth if they knew what the truth was," Luken said of the case made by former company officers David Christensen, Joe Foggia and Pat Withee, and the Christensen Group Inc.
Luken said Thursday that he's won every time he's gone up in court against Christensen Yachts' principals. He said he and Burns bought the business with the Washington state-appointed receiver's approval and "we have 130 people back to work again."
He also threatened them to sue for libel, after being told that Wednesday's court filing accused Luken of stealing from Cleveland, Tenn., billionaire Forrest Preston, founder of Life Care Centers of America.
"Luken stole approximately $5 million that his billionaire friend, Forrest Preston, had entrusted him with to build Preston's yacht," the filing says. "Luken spent the money on a personal airplane, six exotic cars, and to pay off his personal credit card charges. Not surprisingly, Preston then halted construction on his yacht and cut off all funding on the yacht for over a year."
In 2006, Luken built a shipyard on Tellico Lake in Greenback, Tenn., near Vonore. Wednesday's legal filing says that he hoped to convince the Christensen family to move the shipyard to Tennessee, but the shipyard's founder, David Christensen, refused.
Ron Hammontree, executive director of the Tennessee Reservoir Development Agency, said the 400,000-square-foot, eight-story-tall facility sits empty in Greenback, which he called "just a wide place in the road, really."
"The Christensen Yacht building is just standing there, there hasn't been anything done with it since they stopped construction on it," Hammontree said. "Hopefully, one of these days, we'll see them building yachts over there."
Luken said he'd like to build boats in Tennessee, but he's got his hands full with other ventures, including his real estate holdings and ownership of Luken Communications, which he bought with Preston a decade ago. The Chattanooga-based communications company offers old TV shows including "I Spy" and "Fat Albert and the Cosby Kids" for sale to broadcast TV stations.
Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or www.facebook.com/MeetsForBusiness or twitter.com/meetforbusiness or 423-757-6651.